* Genesis offer to open March 29 after bookbuild
* Indicative selling price between NZ$1.35 and NZ$1.65 per
* Final amount to be sold between 30-49 pct, disclosed March
* Sale brings end to NZ govt's asset sale programme
(Recasts, adds analyst comment and company's earnings outlook)
By Gyles Beckford
WELLINGTON, March 13 New Zealand is seeking to
raise as much as NZ$800 million ($680 million) through the sale
of a minority stake in power company Genesis Energy Ltd
, setting a low price range and offering other
sweeteners to draw investors to the last of its state asset
The sale of up to 49 percent in Genesis had always been seen
as the most difficult as it is the third utility in a row the
government has sought to partially privatise. The mainly coal
and gas power firm also has a much higher cost structure than
the earlier offerings of hydro power firms Meridian Energy Ltd
and Mighty River Power.
But the lower-than-expected pricing, a loyalty scheme more
generous than the one offered for Mighty River and indications
of high dividend yields bode well for robust investor interest.
"They have a higher dividend component, and a good incentive
in terms of getting bonus shares. I think they want this to be a
success, they want higher participation," said Nachi Moghe, an
analyst at Morningstar.
The indicative price range was set between NZ$1.35 and
NZ$1.65 per share, valuing the entire company at between NZ$1.35
billion and NZ$1.65 billion. That compares with valuations from
brokerages of between NZ$1.40 and NZ$1.90 a share.
The loyalty scheme awards a bonus share for every 15 held
for 12 months from the offer and the government indicated a
gross dividend payout for the 2015 financial year of up to 16.5
The size of the stake to be sold will be announced on March
26 and the sale will open on March 29 following a two-day
bookbuild with investment institutions. The company will float
on the New Zealand and Australian stock exchanges on April 17.
Genesis, which has about a quarter of the country's retail
electricity market, expects flat revenue and a 9.3 percent drop
in underlying profit over the coming year, according to
financial information released with the offer.
It also said the slow rate of growth in power demand,
climate impact on generation, and uncertainty about future
regulation of the energy sector were all risks to the company's
Seeking to cut borrowing and pay down debt, the government
has already sold 49 percent stakes in Mighty River and Meridian,
and reduced its stake in Air New Zealand Ltd to 54
percent, bringing in a total of NZ$3.93 billion.
($1 = 1.1782 New Zealand dollars)
(Reporting by Gyles Beckford; Editing by Edwina Gibbs)